[Congressional Record Volume 140, Number 35 (Thursday, March 24, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
     CONSUMERS DESERVE RELIEF FROM HIGH CREDIT CARD INTEREST RATES

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                           HON. SAM GEJDENSON

                             of connecticut

                    in the house of representatives

                        Thursday, March 24, 1994

  Mr. GEJDENSON. Mr. Speaker, today I am introducing legislation to 
reduce credit card interest rates by capping them at 9 percent above 
the 6-month T-bill rate. As most observers have noticed, credit card 
interest rates have not exhibited the marked trend toward lower rates 
that has characterized most other branches of the lending industry. In 
fact, while the prime rate has dropped about 9 percent from its high of 
12 years ago, credit card interest rates, on average, fell only two 
points. In contrast, mortgage rates and auto loan rates have plummeted 
several points each. Clearly, credit card interest rates are not 
responsive to market conditions, placing an inequitable burden on 
consumers.
  The bill I am introducing today will give consumers a break from high 
interest rates. At today's 6-month T-bill rate of about 3 percent, 
under my bill, credit card interest rates would be capped at 12 
percent. This would reduce rates 4.5 below the current average. For 
many card holders who are now paying 18 percent, the reduction would be 
even greater.
  Further, the bill gives credit card issuers a reasonable profit 
margin. Consumers need relief from high credit card interest rates 
which have proven to be stubbornly unresponsive to the general climate 
of low interest rates. My bill would provide that relief, and I urge my 
colleagues to support it.

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